Non-alcoholic fatty liver (NAFLD) refers to a wide spectrum of liver disorders ranging from hepatic steatosis to nonalcoholic steatohepatitis, fibrosis and cirrhosis. NAFLD is often associated with obesity, insulin resistance, type 2 diabetes and dyslipidemia. Farnesoid X receptor (FXR) is a nuclear hormone receptor and plays an important role in maintaining bile acid, lipid and glucose homeostasis. Our long-term goal is to identify novel genes/pathways that regulate lipid and carbohydrate metabolism and to elucidate the underlying mechanism(s). Activation of FXR has been shown to lower both hepatic and plasma triglyceride levels. While the mechanism by which FXR regulates plasma triglyceride levels is well understood, the mechanism whereby activation of FXR lowers hepatic triglyceride levels remains to be elucidated. Recent data have suggested that FXR is a therapeutic target for treatment of NAFLD. Thus, elucidation of the mechanism by which activation of FXR lowers hepatic triglyceride levels is both important and necessary. Carboxylesterase 1 (CES1) is highly and principally expressed in the liver. Our preliminary data have shown that i) high blood glucose levels induce hepatic CES1 expression, ii) over-expression of hepatic CES1 markedly reduces hepatic triglyceride levels, lowers plasma glucose levels, and improves glucose tolerance, iii) loss of hepatic CES1 significantly increases hepatic triglyceride levels, and iv) activation of FXR highly induces hepatic CES1 expression. These preliminary data are quite exciting, as they provide the first in vivo evidence that hepatic CES1 may play an important role in regulating hepatic triglyceride and glucose homeostasis. In this proposal, we will further determine the role of hepatic CES1 in controlling glucose and hepatic triglyceride homeostasis and in FXR signaling. We will utilize genetically modified mice, in combination with biochemical, molecular and cellular, and pharmacological approaches to finish the proposed studies. Accomplishing the specific aims in this proposal will provide important insights into the mechanism by which FXR regulates hepatic triglyceride levels, and may identify a novel CES1-glucose-Ces1 pathway that regulates plasma glucose levels. Finally, completion of the proposed studies may lead to identification of hepatic CES1 as a therapeutic target for treatment of NAFLD.